Inner City Press: Investigative Reporting from the United Nations

IMF Rebuffs Stanford Victims on Antigua Despite Iceland, and Romania, Ukraine and UN

By Matthew Russell Lee

UNITED NATIONS, December 3 -- As the victims of the Stanford scam petition the U.S. Congress to stop the flow of any funds from the International Monetary Fund to Stanford's home base of Antigua and Barbuda, the IMF says such considerations play no role in its decisions.

On December 3, Inner City Press asked the IMF since, "there is a proposal in the U.S. Senate seeking to block IMF funds to Antigua until the victims of the Stanford scandal are compensated. Given the IMF's recent actions on Iceland, does the IMF acknowledge any link in Antigua between IMF funds and the compensation of banks' victims?"

IMF spokesperson Jennifer Beckman responded that "it isn’t part of the IMF’s mandate to help private parties in their claims against our member governments."

But in Iceland, the IMF held back its loan or stand by arrangement until the victims, in the UK and the Netherlands, of Icesave were made whole. The IMF is inconsistent, and refuses to forthrightly explain its policies.

Every two weeks, the IMF is supposed to hold a press briefing including online participation by accredited media like Inner City Press. There are been technical snafus, but those on December 3 reached a new low.

Inner City Press, with three or four questions to ask, logged in to the password protected IMF Media Briefing Center before the 9:30 a.m. start of the briefing. But the screen remained dark. This was no out of the normal, as Spokesperson Caroline Atkinson has several times started late.

At 9:58 a.m.., thinking that the briefing may have been delayed or canceled, Inner City Press called the IMF. The answer was that the briefing would be "rebroadcast" later in the day. But what about online participation by accredited media?

There have been technical issues, Inner City Press was told, and was advised to submit its questions in writing, they would be answered. At 10:04 a.m., Inner City Press submitted its questions, to Ms. Atkinson and the general inbox, with a cover note that

for some reason, the Webcast of this morning's IMF briefing didn't work. I waited, thinking the briefing was delayed as sometimes happens. Just now I called the IMF and was told there was a "technical issue," that the briefing would be re-broadcast. When I said I had questions to ask, I was told to send them here and they will be answered. Here they are, I am writing on these topics today:

There is a proposal in the U.S. Senate seeking to block IMF funds to Antigua until the victims of the Stanford scandal are compensated. Given the IMF's recent actions on Iceland, does the IMF acknowledge any link in Antigua between IMF funds and the compensation of banks' victims?

In Romania, the party of the presidential frontrunner has come out against what it calls IMF imposed layoffs in the public sector. Will the IMF confirm it is urging such layoffs, if so how many, and what ramifications if they are not implemented?

Yesterday 2 UN experts told the Press the IMF's Flexible Credit Line discriminates against poorer countries, & that rather than moving beyond conditionality, IMF simply imposes conditions later. Video here.

What is the IMF's response? And to allegation that health crisis in Ukraine is due to IMF imposed cuts? On deadline.

Even twelve hours after these four questions were submitted, the IMF had answered only one of them.

Crackdown on Stanford fraud, IMF not shown

Subj: On Antigua
From: JBeckman@imf.org
To: Innnr City Press
Sent: 12/3/2009 11:11:00 A.M. Eastern Standard Time

Although we are concerned about the Stanford Victims Coalition, it isn’t part of the IMF’s mandate to help private parties in their claims against our member governments.

What about the other answers? Watch this site.

* * *

IMF Murky on Angola's Oil, Bond and China Deals, Doles Out $1.4 Billion

By Matthew Russell Lee

UNITED NATIONS, November 25 -- Days after announcing a $1.4 billion arrangement with Angola, the International Monetary Fund held a press conference call to offer explanations. At the end, things were murkier than before. Inner City Press asked if the IMF had been able to fully assess the income and distribution of revenue from the state owned oil company Sonangol.

The IMF's Lamine Leigh, who led the Fund's missions to Angola in August and September, replied that "in the context of our negotiations, Sonangol participated fairly well." Inner City Press asked, since Sonangol has accounts in off shore financial centers and tax havens, if the IMF had gotten to the bottom of these accounts.

After a long pause, Lamine Leigh proffered another answer, that the government has "committed to steps in the more general area of resource revenue transparency." But what about the Sonangol accounts?

Oil in Angola, Sonangol's accounts not shown

Inner City Press asked about the statement by IMF Deputy Managing Director and Acting Chair Takatoshi Kato that in Angola "measures will be taken to strengthen further the regulatory and supervisory framework." The IMF's Senior Advisor on Africa Sean Nolan replied that the IMF analyzed the effect of the exchange rate on borrowers and "on the banks."

In fact, Angola's government has gotten billions in pre-export oil loans from, for example, BNP Paribas, Standard Chartered and Deutsche Bank. The latter has made similar loans in Turkmenistan, assailed by transparency and human rights advocates. How much of the IMF's new arrangement benefits these banks?

In fact, the questioner after Inner City Press, cutting off follow up, was from Standard Bank. Other than Inner City Press, the only other media questioner was from Reuters.

Before the call ended, Inner City Press was able to ask about Angola's reported $4 billion bond sale planned for December. Sean Nolan said that the IMF's "understanding" with Angola does involve a "fundraising effort," but that the timing was not agreed to, the IMF does not "micromanage" to that extent. Nolan added that there is an agreement on an "overall limit."

"Is it four billion dollars?" Inner City Press asked.

Nolan replied that the precise limit will be "clear in the documents," which have yet to be released. Why play hide the ball?

Nolan praised the country for "appointing reputable financial and legal advisers for the transaction" -- JPMorgan Chase will be the manager.

Nolan continued that the actual size of the bond sale will depend on how much "concessionary lending" Angola gets from "countries with a strong record of financial support to Angola."

Inner City Press asked if the size of China's loans to Angola -- China gets 16% of its foreign oil from Angola -- were known by the IMF or considered.

"That hasn't figured in our discussions," the IMF's Nolan responded. Why not? Watch this site.

* * *

IMF's Report Buries Its Icesave Conditionality, Enforcer's Duplicity?

By Matthew Russell Lee

UNITED NATIONS, November 3 -- While the IMF has acknowledged that its second round of disbursements to crisis-hit Iceland was delayed for months by the country's failure to placate those in the Netherlands and UK who did business with IceSave, the IMF's just released report on Iceland buries the issue on page 30 of the 98 page report. The IMF states that

"[t]he terms and conditions of Nordic loans, amounting to $2.5 billion, have been finalized. Their disbursement has been linked to resolution of the Icesave dispute with the U.K. and Netherlands over deposit insurance liabilities. After protracted discussions, the three governments have reached an agreement on this"

Once that agreement was reached, on October 18, the IMF then went forward with a letter of intent and memorandum of understanding for the second tranche of financing. But, as with the IMF's moves in Latvia for Swedish banks, some see the Fund operating as an enforcement or collections agent for creditors who even less would like to show their hand.

Iceland / Icesave protest, but is the heartfelt sign true?

Since the IMF does not like to admit or reveal its degree of control over the countries it lends to, the de facto conditions for loans, such as paying off on IceSave, are often not explicit in what purport to be full agreements containing all express and implied terms.

In fact, the IMF has claimed that it "no longer" engages in conditionality. But the Iceland report has an entire chart about conditionalities. It's just that the most important one was left unsaid. Is this diplomacy or duplicity?

The IMF's Iceland report continues, about other loan requests including from Russia:

"A loan from the Faroe Islands ($50 million) has already disbursed, and a loan from Poland has been agreed ($200 million), and will disburse alongside the next 3 program reviews. A $500 million loan originally committed by Russia is no longer expected, but the $250 million in over-financing in the original program, an expected macro-stabilization loan from the EU ($150 million), and use of an existing repo facility with the BIS ($700 million, of which $214 million is outstanding) will more than offset this."

Offset may be the right word. Last year, in the midst of Iceland's abortive run for a seat on the UN Security Council, the country announced it had to seek a $4 billion loan from Russia. It was after that that the IMF loan commitment was made -- an "offset," some saw it -- and after talks in Istanbul, on October 15 the already whittled down loan request to Russia was formally rejected.

Then the deal with the UK and Netherlands, and the IMF's releasing. While the IMF calls these types of moves only technical, others call them power politics. Watch this site.

* * *

IMF Plays Ukraine, Zim and Pakistan As "Technical" Questions, Pushes Tax Hikes in Serbia

By Matthew Russell Lee

UNITED NATIONS, October 22 -- Are the International Monetary Fund's negotiations with countries about the level of taxes and salaries for public sector employees, the pricing of electricity and the privatization of social services political, or merely "economic and technical"? The questions arose Thursday in connection with Ukraine, Zimbabwe and Pakistan, among others, in the IMF's first press briefing since its annual meeting in Turkey.

IMF spokesperson Caroline Atkinson fielded questions for half an hour, leaving unanswered one submitted by Inner City Press about Serbia, where the IMF's Paul Thompson has been quoted that "if the Serbian delegation has a concrete pan for decreasing expenses, we will support it, if not, they will have to agree with us and think about increasing taxes." Left unanswered: how is raising taxes merely "technical"?

Ms. Atkinson did respond to Inner City Press' questions about Ukraine, Zimbabwe and Pakistan. While a full transcript is available online here, and video here, in sum the Q & A went as follows:

Inner City Press asked, In Ukraine, the opposition party is critical of the IMF as funding the campaign of Tymoshenko. What is the IMF's response to the opposition's criticism? Ms. Atkinson replied that IMF funds go to the central bank, and that the IMF has a team on the ground in Kiev for a third review.

The opposition was not, it seems, saying that money from the IMF is being used by Tymoshenko for advertisements or to pay poll workers, but rather "MP and opposition government's finance minister, Mykola Azarov, said this at a meeting with delegates of an IMF mission, 'We must say that the program of cooperation with the IMF has turned out to be ineffective, and nothing is left but to consider the IMF's assistance as politically motivated, as funding of one of the candidates running for the presidency.'"

When another reporter asked a follow up question about Ukraine, wondering if with the IMF mission on the ground, the upcoming election "is an issue," Ms. Atkinson said the IMF does not comment while a mission is in the field, negotiating a program, but that information -- and one hopes some questions and answers -- will be provided once the mission is completed

IMF points the way, in budgets... and politics?

On Zimbabwe, Inner City Press asked, "NGOs are critical of the IMF for, they say, pushing Zimbabwe to privatize its social services system. Has the IMF pushed for that, and how does it respond to the criticism?" Ms. Aktinson, while saying she can get back to Inner City Press with more information, argued that the IMF does not favor or disfavor particular privatizations, but must be pushing to strengthen the social service sector to help the poor.

But speaking just ahead of civil society's consultative meeting with an IMF team under Article IV of the Fund's Articles of Agreement, NANGO said "'we are opposed to some IMF polices such as privatization of basic social services. We know it from the past that some IMF policies have worked against people in this country. They have affected the social services sector and their polices are anti-people and negative'... [NANGO] said some of the IMF instigated polices which had brought suffering to the people were the Economic Structural Adjustment Programme (ESAP) and Zimbabwe Programme for Economic and Social Transformation (ZIMPREST)." It's a pretty specific critique, and we'll publish the IMF's response upon receipt.

Following up on Inner City Press' questions and article from August 2009, it asked "in Pakistan, the IMF in August extended for a year the country's time to eliminate electricity subsidies. Now, while the IMF says 2 price increases will be implemented, others say this is not possible politically. What is the IMF's thinking on consumer power pricing in Pakistan?"

Ms. Aktinson replied that "as I believe you know, the issue of issue of electric subsidy is typically done by the World Bank and Asian Development Bank," that IMF gets involved due to the budget."we will be having another review of the Pakistan program in early November." We'll be there....

* * *

On Food Speculation, UN's Expert Says Nothing's Being Done, S. Korean Land Grabs from Madagascar to Sudan, Brazil on Ethanol

By Matthew Russell Lee

UNITED NATIONS, October 21 -- After many speeches at the UN about the need to crack down on financial speculation in food, nothing has been done, the UN's expert on the right to food told Inner City Press on Wednesday.

Olivier de Schutter, a Belgian law professor just back from a visit to Brazil about, among other things, the loss of land for food to ethanol, replied that "nothing is moving at the inter-governmental level." This despite a statement by the G-20 in April favoring the regulation of hedge funds which present systemic risk. The argument is that commodities index funds which speculate in food present systemic risk to net food importing countries. But nothing has been done.

De Schutter spoke about the monopolization of the seed industry, and made a slew of recommendations for governments. The three top monopolizers -- Monsanto, Dupont and the Swiss-based Syngenta -- are all members of the UN Global Compact, and claim to comply with human rights. De Schutter pointed out the antitrust law is directed as national and not global or subnational markets. It is all very heady but one wonders what effect it has.

Brazil might be one of de Schutter's claims to impact. He spoke glowingly of President Lula, saying that Brazil has said that only 19% of land can be used for sugar cane for ethanol, and has committed to monitor labor rights. But what about, for example, Indonesia and Malaysia?

De Schutter, action on food speculation not shown

After De Schutter's briefing, Inner City Press asked his staffer for an update on the proposed land grab in Madagascar by South Korea based Daewoo, which was reputed after the coup in that country. De Schutter had been scheduled to visit, but it was put off by the coup. The same thing happened in Honduras. So perhaps De Schutter does have an effect after all, mused one wag.

Footnote: immediately after De Schutter's briefing, the UN's Haile Menkerios was scheduled to speak to the Press about Madagascar. While the UN usually compartmentalizes its work such that a rapporteur looks at land grabs, while the Secretariat remains on "political affairs" narrowly defined, this land grab played a role in the change of government. Now it's said the South Korean deal is being pursued from India, while South Korea appears to have moved on to 690,000 hectares in Sudan. Watch this site.

These reports are usually also available through Google News and on Lexis-Nexis.

Click here for a Reuters AlertNet piece by this correspondent about Uganda's Lord's Resistance Army. Click here for an earlier Reuters AlertNet piece about the Somali National Reconciliation Congress, and the UN's $200,000 contribution from an undefined trust fund. Video Analysis here

Other, earlier Inner City Press are listed here, and some are available in the ProQuest service, and now on Lexis-Nexis.

Inner City Press -- Investigative Reporting From the Inner City to Wall Street to the United Nations